How to transfer shares after a family member dies: 4 situations

After a person dies, surviving family members need to find a way to continue passing on the deceased person’s estate. That is, how to transfer ownership of property to relatives.

The transmission can vary between content classes. It can also be a function of the form in which the asset is held, in the case of a security – say, in physical or as-is mode. In this article, we look at how one can conduct a transfer of securities (stocks, mutual funds, bonds, etc.) held in a demat account after the death of the account holder. In such a situation, the nominee or legal heir(s) if no nominee has registered a demat account, will have to contact the depository participant (i.e., the depository provider). issue a demat account such as a broker or a bank) with the transfer request slip and related documents.

The nominee is not the owner and is only the custodian/trustee of the assets until they are passed on to the eventual legal heirs based on the deceased person’s will, if any, or the law. inheritance. However, the nominee can also be the legal heir. For example, you can choose one of your two sons as your nominee, but both of them will be your legal heirs unless otherwise specified in your will.

There can be many situations and the documents required for transmission will depend on the specifics of each case.

scene 1

The simplest case is when the demat account is held by three people in general – A, B and C, and A dies. After that, the surviving account holders, B and C will approach their depository participants (DPs) with a remittance request form, A’s death certificate (original or copy thereof). authenticated by a notary public or a first-degree judge), KYC their documents along with verifying the signature that was authenticated by the bank and voiding a check with their name on it or a recent bank statement ( no more than 3 months). For KYC, they can submit PAN card to prove identity and Aadhaar card to prove address. Other options include the Voter card and the Ration card.

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B and C must also submit a properly stamped and authenticated customer master report (CMR) on a joint demat account in their names. This can be an existing or newly opened demat account in the same order of ownership as in the original demat account. A CMR is a digitally or physically signed certificate with your demat account details issued by a broker. After transferring securities to the new demat account, the old demat account no longer exists and will therefore be closed.

In the absence of a will, if the family members have a conciliatory relationship (beneficiaries), it is advisable to register the LOA.

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In the absence of a will, if the family members have a conciliatory relationship (beneficiaries), it is advisable to register the LOA.

Scenario 2

Another relatively simple case is when a demat account has a single owner who has passed away, or the account is held jointly and all the account holders have passed away, and two nominees, for example D and E have been assigned to this account. You can have one nominee and up to three people. In this case, D and E would have to submit the same documents as the surviving account holders filed under Scenario 1 and the same process would follow. They must submit a money transfer request form along with the deceased account holder’s death certificate, their KYC documents along with bank-certified signature verification, and cancel a check in their name or near here (not more than 3 months) report of the Bank. They must also provide a properly stamped and authenticated CMR of a joint demat account in their name (in the same sequence as the nominees).

So, in a situation where a nominee has been appointed, the communication process is fairly straightforward. However, in the absence of a nominee, the process becomes more complicated and additional documents must be submitted depending on the value of the securities in the demat account on the date of the request. This can lead to two situations.

Scenario 3

The Demat account has no nominees and the value of the securities in the Demat account is up to Rs 15 lakh on the claim date. In the absence of a nominee, the legal heirs will have to proceed with the process. They may file a transfer claim together or, alternatively, designate one or more of these individuals as claimants to present the case to the DP on their behalf. The following documents will have to be submitted – death certificate of the deceased account holder and KYC documents along with verification of the certified bank signature(s) of the claimant(s) and legal heirs France. The claimant(s) will also be required to provide a canceled check with their name on it or their recent bank statement.

Legal heirs will be required to provide a NOC (no objection certificate) to demonstrate that they agree with the claimant selected to represent them. In addition, they must also file personal affidavits and indemnity bonds.

Scenario 4

The Demat account has no nominees and the value of the securities in the Demat account exceeds Rs 15 lakh on the claim date. Under this scenario, the same documents as required in scenario 3 would have to be provided to the DP. In addition, the claimant(s) must provide probate, or certificate of succession, or letter of administration (LOA) to help establish their identity as the claimant(s).

Time and cost

“Although a will is the most reliable and legally accepted document to aid in the division of property upon the death of the property owner, in the absence of a will, the heirs Legal succession needs to go through a documented process and can take time, says Rajat Dutta, founder and initiator, Inheritance Needs Service. Sanober Marolia, head of estate planning, Anand Rathi Wealth emphasized that the transfer process can take around six business days after all documents have been submitted. This is subject to all documents being in order. “When there is no nomination in the downgrade account, you will have to get probate/certificate of succession/LOA and this can take anywhere from six months to up to a year.” will and last will of the deceased and thus certify that the distribution of property is made in accordance with that will.

Dutta suggests that if there is no will, if there is a harmonious relationship between family members (beneficiaries), then a LOA should be secured. The LOA lists all of the deceased’s assets and refers to the administrator (designated by the beneficiary) who will administer the distribution of all assets with the beneficiary’s consent. In the event of a family dispute, a certificate of inheritance from the court is required. An Inheritance Certificate simply lists all the assets and names of all the heirs of the deceased person. The distribution is made according to the relevant inheritance laws.

According to Marolia, there are no fees for transmission. But there are costs involved in obtaining probate/inheritance certificates/LOA, which often vary from city to city and from attorney to attorney. For example, in Mumbai, court fees are capped at Rs. 75,000, and attorney fees can range from Rs. 1.25-1.5 thousand.

Given that having a nominee makes the transmission process significantly simpler and smoother, registering a nominee is an absolute must. Note that since a nominee must be appointed at the level of the demat account, he or she will become the relevant custodian of all securities in the demat account upon the account holder’s death.

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